Analysts say $3.2 billion acquisition is an ‘Internet of Everything’ play

Nest Labs is best known for its innovative new home products, including an energy-efficient thermostat and smoke/carbon dioxide alarm. Analysts say the Google buy is clearly aimed at the emerging market for consumer devices managed from and connected to the Web.

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Stocks to watch Tuesday include Google, which announced it is buying Nest Labs for $3.2 billion. Photo: AP

Wedbush analyst Shyam Patil echoed a similar view, saying, “I wouldn’t say [buying Nest Labs] is on the top of my list. But I certainly see how it makes sense.”

Especially given the dominant theme in the just-concluded Consumer Electronics Show in Las Vegas last week, he added.

“The ‘Internet of things’ and the connected devices -- those were the biggest things that came out of CES,” he told MarketWatch. “This is very much a play on that theme. This is obviously focused on the connected home or home automation.”

In a statement, Google CEO Larry Page praised Nest Labs for ”already delivering amazing products you can buy right now -- thermostats that save energy and smoke/CO alarms that can help keep your family safe.”

But Google likely has its eyes on issues beyond home safety. Analyst Ray Wang of Constellation Research said buying Nest also boosts Google’s position in the next battlegrounds when it comes to connected devices.

“The next battle in connected devices will be cars and homes,” Constellation Research analyst Ray Wang told MarketWatch. “This is really about going after connected devices and delivering them on Google platforms.”

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